Almost buried in the papers by the horror of the unfolding Iraq story and the fanfare anticipating Condoleezza Rice’s testimony before the 9/11 Commission, Sen. John Kerry last night delivered his anticipated campaign speech outlining specifics of his budget proposal. And this morning the Washington Post took honors for the most detailed coverage of the number-laden event.
Still, the gang here at Campaign Desk had a double take when it read the following paragraph on Kerry’s estate tax proposal:
For the first time, Kerry detailed his plan to raise the amount of an estate not subject to taxation to $4 million for families and $10 million for a family-owned farm. Bush’s tax cut that was passed in 2001 also raised that exemption, but not until late this decade, and repeals it in 2010. Kerry would maintain the estate tax for large inheritances. (italics added)
The Post, which picked up that language from the Kerry campaign press release, provides the reader little insight into a plan that on the surface appears to lower taxes on the wealthy – a suggestion that would seem to run counterintuitive both to Kerry’s talking points and to the Bush campaign attack description of Kerry as a “tax-and-spend” Democrat.
A few simple lines of added context would reveal the true colors of Kerry’s plan. Since they’re absent from most press accounts of the proposal, permit us to do the honors:
Current tax law taxes estates valued at $1.5 million and greater. Over the next five years the exemption will rise incrementally to $3.5 million, until 2010, at which point the entire estate tax momentarily evaporates, only to revert back to its its 2002 level in the year 2011. Fearful of this event, the Bush administration has made the complete elimination of the “death tax” now and forever a top priority.
Enter stage left Kerry’s new proposal, as the San Francisco Chronicle put it, to “reduce but not repeal” the “death tax”. Kerry’s plan would allow estates falling in the more-than $1.5 million and less-than $4 million that are currently taxed to go untaxed; by doing so, it would greatly reduce the number of Americans affected by the estate tax. The logic follows that this would quiet, or at least reduce, the lobby calling for outright elimination of the estate tax, allowing the government to continue to reap the benefits from a nearly 50% tax on estates over $4 million.
So, although it appears Kerry is sitting shotgun in Bush’s bus, giving wealthy estates a free ride, his actual motives are that of a “Ghostbuster” working to ensure that the “Stay-Puft Marshmallow Men” remain under government wraps.
–Thomas Lang
Update, 4/9 10:45 a.m.:The above post has been changed to accurately reflect President Bush’s speech of January 20, 2004.
Thomas Lang was a writer at CJR Daily.